Looks like legal sports betting might be coming to Oklahoma. Or not.
Governor Kevin Stitt announced Tuesday that he negotiated new pacts with the Comanche and Otoe-Missouria tribes to expand gaming to include sports betting, iLottery, and the construction of three new facilities for each tribe. The two 15-year pacts are virtually identical.
The announcement is subject to federal approval, and the Oklahoma Indian Gaming Association almost immediately pooh-poohed the pacts, saying Stitt didn’t have the authority to expand gaming without legislative approval.
According to several sources, Oklahoma tribes and the state have long been at odds, and Stitt may be trying to exert pressure on other tribes by negotiating one tribe at a time. In addition, OIGA, like any gaming association, would have preferred to negotiate as a group and is reportedly unhappy two of the tribes split off.
Governor, attorney general at odds
OIGA Chairman Matthew L. Morgan responds to Governor Kevin Stitt's press conference today announcing proposed compact agreements with the Comanche Nation of Oklahoma and the Otoe-Missouria Tribe of Indians. @MLMorgan_Okla @OMT_of_Indianshttps://t.co/rsKqoOaPnF
— OK Indian Gaming (@okindiangaming) April 21, 2020
The state’s attorney general, Mike Hunter, issued this statement: “The agreements signed today between the governor, the Otoe-Missouria Tribe and the Comanche Nation are not authorized by the state Tribal Gaming Act.” Hunter said in a written statement shared with local media, “The governor has the authority to negotiate compacts with the tribes on behalf of the state. However, only gaming activities authorized by the act may be the subject of a tribal gaming compact. Sports betting is not a prescribed ‘covered game’ under the act.”
“That’s really in the governor’s purview to do,” Stitt told Fox25. “Sports book is part of covered games, and so we don’t think there’s a need for the legislature to vote on that.”
The tribes are two of 12 that had filed a federal lawsuit against Stitt with regard to gaming, according to The Oklahoman.
Though neither tribe has a casino in or near a key metropolitan area, the Otoe-Missouria have two facilities less than 25 miles from Stillwater, where the Oklahoma State campus is located. They are also easy driving distance from Tulsa, the state’s second-biggest city. The Comanche casinos are in a heavily military area near Lawton.
There are 36 tribes that operate casinos throughout Oklahoma, and the Otoe-Missouria and Comanche are two of the smaller tribes. The Chickasaw, one of the bigger players, own eight casinos, including the WinStar, which made news when it announced a groundbreaking partnership with the Dallas Cowboys in 2018.
Jerry Jones announces WinStar World Casino is the official casino sponsor of Cowboys. First NFL team to announce casino delegation. League owners recently passed amendment to allow. pic.twitter.com/w8HcGdO9di
— Kate Hairopoulos (@khairopoulos) September 6, 2018
Sportsbooks would pay plenty to state
The Otoe-Missouria own five casinos in Oklahoma and the Comanche own four, though in both cases, not all are glitzy, full-service affairs. Under the new compact, the tribes would be limited to offering sports betting at two locations.
“We’re happy to have it and hopefully everybody can kind of agree and things will get moving quickly without much craziness,” Oklahoma-based industry veteran Kevin Slicker told Sports Handle. “It’s always a step in the right direction if we can get sports betting going in another state.”
A key part of the new pacts is how the tribes will pay the state via “Substantial Exclusivity Fees,” which are a workaround for taxes, since states can’t directly tax tribes. The pacts call for 1.1% of handle, which could work out to 25% or more of gross gaming revenue. Most operators look for a tax rate of 10% of less, though Pennsylvania taxes its operators 36% of grossing gaming revenue (ggr) and when Tennessee has live sports betting, operators will pay 20% in taxes. Comparatively, casino games in Oklahoma will be taxed at 4.5% of “adjusted net win,” which appears to be ggr.
Tribes would also be required to the pay state an “annual oversight assessment” to cover any costs the state incurs from tribal gaming. The fees are on a sliding scale starting at $25,000.
Commercial casinos a possiblity
The pacts also include a provision for the building of five non-tribal gaming locations in the state:
At some future time, the State may license up to five (5) non-tribal Event Wagering locations, with the same requirements as those under this Compact; provided, however, that the Tribe’s right to engage in Event Wagering shall in no way be subject to the State’s conduct of Event Wagering. For the avoidance of doubt, even if it should be found that the State’s conduct of Event Wagering is in violation of the State’s
obligations, if any, under compacts with other Oklahoma tribes, such a finding shall have no effect on the Tribe’s right to engage in Event Wagering.
We're in the middle of a pandemic, already facing a state revenue shortfall, and the price of oil has fallen off a cliff.
What is Gov. Stitt doing? Exceeding his authority in his quixotic attempt to finagle the tribes over casinos.https://t.co/bBgGkgvupe
— Chris Powell (@okcspowell) April 22, 2020
The pacts define sports betting to include sporting events, eSports and daily fantasy as well as “other events,” leaving the door open for the possibility of wagering on the Academy Awards or other events that are not specifically sports.
There would be no statewide mobile wagering under the pacts, which call for sports betting to take place in person or electronically within 1,000 feet of a facility or within “the land-trust boundary, whichever is closer.” That seems to allow for the possibility of on-site mobile, meaning that a customer at a casino resort with a sportsbook could wager via mobile application from anywhere on the property.